MoffettNathanson Research’s Michael Nathanson says they will, calling for AMC Networks and Scripps Networks to join bigger partners — and Viacom and CBS to reunite. By his calculations, if Comcast and Time Warner Cable merge, then TWC’s programming costs could drop by 15% — a cut of $500M a year from its outlays for broadcast and pay TV channels. That could be seen as good for consumers if Comcast can cast the change as a brake on rising monthly rates. But programmers would have to revise their financial plans which count on steady annual price increases. Broadcasters in particular likely would “howl in protest…while simultaneously attempting to further consolidate on their own (a headache the FCC doesn’t need),” says Craig Moffett, a colleague at the firm that bears the analysts’ names. Nathanson says broadcasters who might be hit hardest by Comcast’s growing clout are ABC stations, Nexstar, Media General, LIN TV and Hearst. More broadly, though, “scale is increasingly becoming more important in securing higher affiliates fees,” he says. Disney, Fox and NBCU likely will account for about two-thirds of increases in distributor payments from 2013 to 2015. That could “force those with more limited scale to reconsider their M&A options.” Two independent networks, Bloomberg TV and Tennis Channel, asked the FCC for help when they believed that Comcast treated them unfairly. Comcast denied both charges. CBS chief Les Moonves, speaking to CNBC today, sounded confident about his position although he’s still examining the deal. “I think Comcast appreciates the value of our content and will pay appropriately for it.” And Comcast says channel owners shouldn’t worry. “The balance of power has tilted pretty decisively to the programmer side” over the last several years, EVP David Cohen says. “I don’t believe there’s any way that they’re going to be hurt from a price perspective.”
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